Australian PMI: Manufacturing consolidates in May

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) has consolidated its recent gains, falling 2.4 points to 51.0 in May to remain above the 50-point level separating expansion from contraction.

The result continues the longest unbroken period of growth for the Australian PMI since September 2006, now at 11 months. As in April, six of the seven activity sub-indexes expanded in May, although most eased from last month. The exception, once again, was the employment sub-index (down 3.4 points to 45.6).

“Australian manufacturing is recovering in 2016 in response to the lower dollar, but it is also rebalancing in response to changes in global production and consumption trends,” said Ai Group Chief Executive, Innes Willox. “We are seeing an increasing focus on consumable goods such as food, groceries and health products as well as building materials for the construction industry. We are still seeing contraction, however, in the heavy industrials categories and especially in metals and some types of machinery and equipment manufacturing such as automotive production. On balance, the positives are outweighing the negatives at present.”